Diesel trucks out, LNG big rigs in

On a recent morning in Yutian, a dusty town bisected by the highway that connects Beijing to the sea, Su Meiquan strolled into a dealership packed with hulking trucks and prepared to drive off with a brand new rig.

After years of driving a diesel truck for a trucking company, he had decided to buy his own vehicle－a bright red rig fueled with liquefied natural gas, capable of hauling as much as 40 metric tons of loads including steel or slabs of marble.

Su hopes the LNG truck－less polluting and cheaper to operate than diesel ones－will be the cornerstone of his own business, plying the route to the western fringes of China.

"Everybody says gas is cleaner with nearly no emissions," he said after signing a stack of paperwork in the dealer's office. In front of him, photos of proud drivers posing in front of their own new LNG trucks had been taped to the wall.

Sales of large LNG trucks are expected to hit record levels in China this year as the government steps up an anti-pollution campaign that includes curbs on heavy-duty diesel vehicles.

LNG trucks account for about 4 percent of the more than six million heavy vehicles able to haul 40 to 49 tons of goods that are currently on China's roads. The vast majority of the 43 billion tons of freight transported across China last year was by highway.

But demand for LNG trucks is soaring as companies and manufacturers shift to vehicles that run on the gas Beijing sees as a key part of its war against smog.

Sales of LNG heavy trucks surged 540 percent to nearly 39,000 in the first seven months of the year, according to Cassie Liu, a truck analyst with the IHS Markit consultancy.

That was partly fueled by a ban this year on the use of diesel trucks to transport coal at northern ports in provinces including Hebei and Shandong, and in Tianjin.

"We are seeing a blowout in LNG trucks this year, thanks to the government's policy push," said Mu Lei, marketing manager for China National Heavy Duty Truck Group CNHTC, known as Sinotruk, the country's largest manufacturer of heavy-duty trucks.

The shift from diesel to LNG is among many government measures aimed at clearing the air, especially in the north, which was often shrouded in coal-fueled smog for much of the winter in the past.

One major project is piping gas to 1.4 million households across the north for heating this winter, shifting away from coal.

China, already the world's No 3 LNG consumer, has seen imports jump 45 percent so far this year.

Chinese companies including Jereh Group and ENN Energy Holding, which build LNG filling stations, and Zhangjiagang CIMC Sanctum Cryogenic Equipment Co Ltd, which specializes in LNG tanks, are expected to benefit from the gas boom, analysts said.

Sales of new heavy-duty trucks, including diesel and LNG vehicles, jumped 75 percent in the January-August period to 768,214, according to industry website www.chinatruck.org.

It did not break down the numbers, but companies say that diesel growth is being dwarfed by that of the LNG trucks.

Last week, Sinotruk netted new orders for 1,371 heavy-duty trucks, 900 of which run on LNG, at an event bringing together coal transport companies from seven northern Chinese cities, Mu said. In the first half of this year, Sinotruk sold 5,200 LNG trucks, up 650 percent year on year.

"Gas trucks are more environmentally friendly and more economic," said Lai Wei, general manager of Tianjin Shengteng Transport Company, a privately run trucking company.

Lai is tripling his LNG fleet to more than 100 by the end of this year, adding 65 new trucks made by Shaanxi Heavy Duty Automobile Co Ltd, the country's largest LNG vehicle producer.

Reuters